Market Street power plant site still may reel in Bass Pro Shop

Hopes for opening a Bass Pro Shop in time for the 2013 Super Bowl at the Market Street power plant have been dashed as vicious battles in the bankruptcy reorganization of Market Street Properties LLC, the owner of the 111-year-old building, shattered the company's original timetable. "We've exhausted two years in federal court fighting for the remedies of all the people who have invested," said project development manager Michael Ullian, who is working on lining up tenants for the building and surrounding area. "It was a real fight just to get control."

Rusty Costanza, Times-Picayune archiveMarket Street Properties LLC is evaluating whether to have a single large tenant such as Bass Pro, which would better preserve the impressive 111-year-old industrial space but deliver lower rent, or divide the building into parcels for several tenants, which would compromise the interior but could provide higher rents.

But fortunes could be turning for the iconic building with two smokestacks just upriver from the Ernest N. Morial Convention Center. On Monday, Bankruptcy Judge Elizabeth Magner told the company it needed to file a reorganization plan by the end of this month, a key step in emerging from bankruptcy.

The company faces big hurdles in the coming months with filing the plan, getting other stakeholders to approve it and lining up financing for its visions. If the redevelopment succeeds, it could give a lift to real estate development efforts in the area. If it fails, it could lose the building and have to convert the bankruptcy to a liquidation.

Real estate efforts already show signs of stirring in the area. A joint venture of Manning Architects and Eskew+Dumez+Ripple -- the same firms that have been mentioned as possible master planners for the power plant site -- were hired by the Convention Center in October. They're examining traffic patterns, checking out transportation options, and investigating possibilities for developing hotel rooms, entertainment venues and restaurants at the 50-acre site near the power plant that originally was slated for the Phase IV expansion of the Convention Center.

Tulane University's RiverSphere, a research center, education facility, exhibition space and a business incubator focused on water sustainability and renewable energy that eventually will be located at the Robins Street wharf, received a grant in January to build a facility to begin testing underwater electricity turbines. Meanwhile, Mardi Gras World moved to the area in 2008, putting a tourist attraction at the far end of the Convention Center.

Bass Pro still in the picture

Ullian said that Bass Pro "is still circling around" the 500,000 square foot power plant, and is "one of several" potential anchor tenants under consideration. Market Street is evaluating whether to have one tenant such as Bass Pro, which would better preserve the space by taking up the whole building but deliver lower rent, or divide the building into parcels for several tenants, which would compromise the impressive industrial space inside the building but could provide a better retail mix for local residents and higher rents.

"We're going to have to weigh which is best for the project," Ullian said.

Bass Pro spokesman Larry Whiteley said he knew nothing about the possibility and probably would have been notified if a letter of intent had been signed. Because Bass Pro stores are enormous and each one is different, Whiteley said stores usually take more than a year to build, definitively counting out the Super Bowl aspirations.

Bass Pro has also been mentioned as a possibility for an outlet mall at the former Six Flags site.

The city says it has had no new discussions with Market Street representatives in a while but would love to see something happen at the site. The Magazine Street Merchants Association and local neighborhood associations also say the developers have been silent since talking up Bass Pro in early 2011, so they've assumed the Bass Pro proposal was dead.

Market Street representatives came to a Coliseum Square Association meeting a little over a year ago to tell neighbors about Bass Pro, but president Robert Wolf said his group has heard nothing since. "I don't think it got any traction after that," Wolf said. "We're certainly curious. Anything to anchor that part of town would be nice."

Mickey Palmer, a developer whose family owns the A to Z Paper warehouse around the corner from the power plant, said developing the area would take deep pockets and a solid plan, but he thinks a mix of shops, restaurants, condominiums and a hotel on the far side of the Convention Center would be a good fit. "Development is surely going to move that way," Palmer said. "It could be an extension of the Warehouse District."

Seeking to leave bankruptcy

While they work on a plan for the building and surrounding area, Ullian said the Chicago company Cohen Financial is investigating financing for the company to emerge from bankruptcy.

If something didn't work out with the exit financing, Market Street Ventures, a company incorporated by Joseph Jaeger, chief executive of MCC Group construction, with other local investors, is the heir apparent. Jaeger's group provided $3.5 million financing for Market Street Properties to use while the company was reorganizing in Chapter 11 bankruptcy, which gave it a first lien on the property if the loan was not paid back. The agreement was extended beyond its original Aug. 1 expiration, and it just expired on Feb. 28, but the parties are continuing to work together on friendly terms, representatives say.

With its mechanical, electrical and HVAC contracting services, MCC is in a good position to work on complex projects. In recent years, Jaeger has become a major investor in hotel projects around the city that needed work. His properties are now run as the New Orleans Hotel Collection.

Market Street Properties has also survived on renting the building, which has several-story open spaces, deep pools and industrial artifacts, to movie projects such as "The Green Lantern."

Legal entanglements

Market Street Properties originally hoped to sign a lease with Bass Pro last spring, recruit other retailers at the International Council of Shopping Centers meeting in May for adjacent spots around the building, and emerge from bankruptcy either last May, or at the latest, in August, but the company was delayed by disputes with other parties with historical ties to the project: Tamara Jeanne "T.J." Fisher; her husband, Stuart "Neil" Fisher; and Florida developer Michael Samuel.

After a two-day trial in August about how money was handled by the parties, Market Street struck a deal with the Fishers and their companies and Samuel and his companies. The agreement definitely removed the Fishers, Samuel and their companies from involvement in the power plant project, and Market Street Properties won title to two adjacent properties, 1544 and 1556 Tchoupitoulas, where the former TwiRoPa Mills nightclub was located. The former twine factory, and later nightclub, was razed in 2007 to make way for development at the power plant.

Once it had control of the Tchoupitoulas properties, Market Street agreed in September to sell them to its lender, Boxer Finance LLC, in order to get a $2 million credit on its debts and settle a dispute over control of $4 million in an escrow account that was intended to clean up environmental issues at the plant, which had been a coal-fired electricity plant. But Market Street actually wants the Tchoupitoulas properties for its development plans, so the agreement included an option to lease the properties for $10 a month, and have an option to buy back the property and a right of first refusal for 24 months. Market Street has not exercised that option, but it intends to.

Ullian said with disputes out of the way, Market Street Properties is poised to make progress in the coming weeks on plans for the building and how the project can enhance other efforts to develop the area.

"Now we're on a clearer path, and we've gotten the right people supporting us," Ullian said. "We are cooperating with the state and the Convention Center in trying to craft a vision that's accretive to all of the property owners around there. I don't know how it's going to work yet."